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February 2008

PricewaterhouseCoopers/ National Venture PricewaterhouseCoopers/ National Venture Capital Association MoneyTree™ ReportCapital Association MoneyTree™ Reportbased on data from Thomson Financialbased on data from Thomson Financial

Shaking the MoneyTree™™

Q4/Full-Year 2007 UpdateFebruary 2008

Raleigh, NCRaleigh, NCFebruary 2008February 2008

February 2008Slide 2

PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial

Today’s program

The MoneyTree Report – Q4/Full-Year 2007 Analysis• presented by Jeff Barber, PricewaterhouseCoopers LLP

Venture Capital Panel• Mitch Mumma, Intersouth Partners• Sherrill Neff, Quaker BioVentures

Question and Answer Session



Speaker Bios



Jeff Barber

Jeff Barber is a partner in the PricewaterhouseCoopers Raleigh office. He is a leader in the PwC Carolinas Technology Industry Group, a team of thirty professionals who provide services and support to over fifty technology-based companies. Jeff has over twenty-five years of experience serving technology companies, including extensive experience working with clients from the organizational stage through the initial public offering and subsequent expansion.

Jeff spent two years in the PwC National Office in New York City where he worked in the Firm’s Accounting and SEC Group. His responsibilities there included researching accounting issues, writing various PricewaterhouseCoopers publications and assisting the Firm’s national consulting partners in their consultation on client related matters.

Jeff is actively involved in the Triangle area business community. He is currently on the board of directors of the Council for Entrepreneurial Development (“CED”), where he is a past chairman of the board, and the North Carolina Technology Association (“NCTA”), where he has served as Treasurer. In January 2006, Jeff received the NCTA “Volunteer of the Year” award. In June 2000, Jeff received the CED “Outstanding Service” award. Jeff is also actively involved in various civic organizations. He currently serves on the board of directors of the North Carolina Museum of Art Foundation and the Juvenile Diabetes Research Foundation. In the past, he has served as a member of the UNC Accounting Advisory Board and a member of the NCSU College of Management Board of Advisors. In addition, Jeff has served as president of Artspace, Inc., chairman of the board of the Community Learning Centers, Inc., a member of the board of directors of the Greater Raleigh Chamber of Commerce and a member of the board of directors of the United Arts Council. Jeff is a graduate of the Leadership Raleigh and Leadership Lexington (KY) training programs. He holds a B.S. in Accounting from the University of Kentucky.



Mitch Mumma

Mitch is primarily responsible for Intersouth's information technology portfolio. He joined Intersouth in

1989 at the inception of Fund II. Mitch has full-cycle venture investment experience and has held

management positions with various companies throughout his career, including three start-up

companies, all of which subsequently went public.

Mitch is known for board and syndicate leadership as well as tireless focus on portfolio company

success. He has provided early financing and venture leadership for numerous successful companies.

He currently serves on the boards of five portfolio companies. He also served as CEO of an Intersouth

portfolio company.

Prior to joining Intersouth, Mitch worked in finance and operations for a high growth computer hardware

and software company. Previously, he worked as a manager in the high growth business practice at

Touche Ross & Co. (now Deloitte & Touche).

Mitch is a leader in the entrepreneurial community and a sought-after speaker. He is an adjunct

professor at the UNC Kenan-Flagler School of Business and has long held leadership roles in the

Council for Entrepreneurial Development (CED) and North Carolina Technology Association (NCTA).

He also has served as a mentor to the Kauffman Fellows Program. He earned a degree in

Management Science from Duke University.



Sherrill Neff

Sherrill is a founding partner of Quaker BioVentures. He is well regarded in the

biopharmaceutical industry, is a previous Chairman of the Greater Philadelphia Venture Group,

and previous President of the Pennsylvania Biotechnology Association. He sits on the following

boards of directors: Amicus Therapeutics, Biolex Therapeutics, Neuronetics, Optherion, Regado

Biosciences, Resource Capital Corporation, University City Science Center, the Biotechnology

Institute, and the Policy Board of WXPN at the University of Pennsylvania.

Prior to forming Quaker BioVentures, Sherrill was President, Chief Operating Officer, and a

Director of Neose Technologies, Inc., a publicly traded life sciences company. Previously, he

was Senior Vice President, Corporate Development at U.S. Healthcare, Inc., a leading publicly

traded health maintenance organization. Sherrill was formerly a Managing Director in the

investment banking division of Alex. Brown & Sons, and formerly an attorney at Morgan, Lewis &

Bockius.

Sherrill is a graduate of Wesleyan University and the University of Michigan Law School.



About The Report

• PricewaterhouseCoopers and the National Venture Capital Association produce the MoneyTree Report™ based on data from Thomson Financial

• ‘Core’ measure of equity investments in venture-backed companies in the United States

• Companies have received at least one round of financing involving a professional VC firm or equivalent

• Captures: tranches, not term sheets, foreign VCs, qualified private placement

• Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc.

• MoneyTree™ Report in its 13th year

• Results online at www.pwcmoneytree.com, www.nvca.org, www.venturexpert.com



The National Picture

Historical Trends



MoneyTree Total Investments: Q1 1999 – Q4 2007

($ in billions)

$6.6

$28.

4

$12.

8

$6.9

$4.3 $5

.3

$5.1 $6

.4 $7.5

$11.

0

$28.

2

$11.

4

$6.0

$5.0 $6

.3

$6.3 $7.0

$7.3

$13.

1

$26.

4

$8.3

$4.6

$4.9

$5.0 $5

.9 $6.8 $7

.6

$23.

3

$22.

1

$8.1

$4.5 $5

.6

$6.0

$5.8

$6.3 $7.0

$0.0

$8.0

$16.0

$24.0

$32.0

1999 2000 2001 2002 2003 2004 2005 2006 2007

#

of

Deals

1999 2000 2001 2002 2003 2004 2005 2006 2007

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

918 1304 1420 1865 2130 2109 1930 1742 1284 1219 1000 975 887 848 688 719 691 736 712 783 712 847 685 838 724 820 785 809 868 944 900 918 858 1018 974 963



MoneyTree Total Investments: 1980 – 2007

($ in billions)

$0.6

$1.2

$1.6

$3.0

$3.0

$2.8

$3.0

$3.3

$3.3

$3.3

$2.8

$2.2

$3.6

$3.7

$4.1 $8

.0 $11.

3

$14.

9

$21.

1

$54.

1

$105

.1

$40.

6

$22.

0

$19.

7

$22.

5

$23.

0

$26.

6

$29.

4

$0

$20

$40

$60

$80

$100

$120

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Annual Venture Capital Investments 1980 to 2007



HA W AI I

M AUI

KAHO O L AW E

L ANAI

M O L O KAI

O AHU

KAU AI

NI I HAU

Investments by Region: Q4 2007

Texas$426.6

45 Deals

Silicon Valley$2,399.3

301 Deals

New England$860.7

111 Deals

Midwest$243.8

62 Deals

South Central$58.9

9 Deals

Northwest$438.2

54 DealsSacramento/N. CA

$48.9 7 Deals

San Diego$423.8

32 Deals

Southeast$479.4

55 Deals

Southwest$49.8

17 Deals

LA/Orange County$253.9

46 Deals

DC/Metroplex$403.9

71 Deals

NY Metro$471.0

70 Deals

Philadelphia Metro$107.7

21 Deals

North Central$159.2

28 Deals

Q4 2007 Total Investments - $7,011 in 963 Deals

Colorado$102.4

20 Deals

AK/HI/PR$8.9

2 Deals

Upstate NY$74.7

12 Deals



Investments by Region: Q4 2007($ in millions)

$8.9

$48.9

$102.4

$107.7

$159.2

$243.8

$253.9

$403.9

$423.8

$426.6

$438.2

$471.0

$479.4

$860.7

$49.8

$58.9

$74.7

$2,399.3

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

AK/HI/PR

Sacramento/N.Cal

SouthWest

South Central

Upstate NY

Colorado

Philadelphia Metro

North Central

Midwest

LA/Orange County

DC/Metroplex

San Diego

Texas

Northwest

NY Metro

Southeast

New England

Silicon Valley

Region# of

Deals

% Change $

from Q3 ‘07

Silicon Valley 301 -9.29%

New England 111 -11.34%

DC/Metroplex 71 14.95%

NY Metro 70 4.20%

Midwest 62 -37.65%

Southeast 55 22.29%

Northwest 54 21.16%

LA/Orange County 46 -39.89%

Texas 45 8.52%

San Diego 32 3.05%

North Central 28 40.77%

Philadelphia Metro 21 -61.32%

Colorado 20 -50.16%

SouthWest 17 -67.88%

Upstate NY 12 185.64%

South Central 9 226.59%

Sacramento/N.Cal 7 237.49%

AK/HI/PRl 2 118.82%

Total 963 -7.82%

Q4 2007 Total: $7,011 in 963 Deals



HA W AI I

M AUI

KAHO O L AW E

L ANAI

M O L O KAI

O AHU

KAU AI

NI I HAU

Investments by Region: Full Year 2007

Texas$1,416.5

166 Deals

Silicon Valley$10,066.5

1,184 Deals

New England$3,695.3

478 Deals

Midwest$1,298.3

236 Deals

South Central$92.5

27 Deals

Northwest$1,636.4

216 DealsSacramento/N. CA

$99.9 16 Deals

San Diego$1,988.8

159 Deals

Southeast$1,856.4

243 Deals

Southwest$540.9

90 Deals

LA/Orange County$1,647.8

205 Deals

DC/Metroplex$1,241.8

207 Deals

NY Metro$1,715.5

254 Deals

Philadelphia Metro$861.5

125 Deals

North Central$525.6

80 Deals

2007 Total Investments - $29.4B in 3,813 Deals

Colorado$564.2

86 Deals

AK/HI/PR$20.5 9 Deals

Upstate NY$137.4

32 Deals



Investments by Region: Full Year 2007($ in millions)

$20.5

$92.5

$540.9

$564.2

$861.5

$1,241.8

$1,298.3

$1,416.5

$1,636.4

$1,647.8

$1,715.5

$1,856.4

$1,988.8

$3,695.3

$99.9

$137.4

$525.6

$10,066.5

$0 $3,000 $6,000 $9,000 $12,000

AK/HI/PR

South Central

Sacramento/N.Cal

Upstate NY

North Central

SouthWest

Colorado

Philadelphia Metro

DC/Metroplex

Midwest

Texas

Northwest

LA/Orange County

NY Metro

Southeast

San Diego

New England

Silicon Valley

Region# of

Deals

% Change $

from 2006

Silicon Valley 1,184 5.65%

New England 478 18.56%

NY Metro 254 -14.20%

Southeast 243 46.42%

Midwest 236 32.82%

Northwest 216 37.04%

DC/Metroplex 207 8.43%

LA/Orange County 205 -14.52%

Texas 166 -2.28%

San Diego 159 52.27%

Philadelphia Metro 125 12.64%

SouthWest 90 7.79%

Colorado 86 -14.61%

North Central 80 31.15%

Upstate NY 32 -11.84%

South Central 27 17.15%

Sacramento/N.Cal 16 254.63%

AK/HI/PR 9 -56.26%

Total 3,813 10.75%

2007 Total: $29.4B in 3,813 Deals



Q4 2007 Top 10 States Garnering Venture FundsQ4 2007 Top 10 States Garnering Venture Funds

State Deals Investment Amount

1.California 386 $3,125,906,200

2.Massachusetts 104 $ 830,269,700

3.Texas 85 $ 426,608,200

4.New York 57 $ 360,388,500

5.North Carolina 21 $353,337,100

6.Washington 44 $345,468,300

7.Maryland 38 $205,813,100

8.Florida 17 $ 193,025,100

9.Virginia 28 $ 164,865,300

10.New Jersey 19 $ 137,133,500



Full-Year 2007 Top 10 States Garnering Venture FundsFull-Year 2007 Top 10 States Garnering Venture Funds

State Deals Investment Amount

1.California 1,564 $13,802,961,100

2.Massachusetts 430 $ 3,489,131,900

3.Texas 166 $ 1,416,470,600

4.Washington 170 $ 1,314,590,200

5.New York 191 $1,195,328,800

6.Pennsylvania 150 $835,166,500

7.North Carolina 71 $ 812,022,200

8.Maryland 99 $ 635,283,700

9.New Jersey 91 $624,906,800

10.Florida 63 $ 608,338,400



Investments by Industry: Full Year 2007($ in millions)

$11.8

$368.1

$579.6

$655.9

$840.0

$1,252.1

$1,297.6

$1,848.0

$1,877.4

$2,143.1

$2,696.3

$3,897.7

$5,215.5

$5,273.0

$415.3

$468.2

$566.1

$0 $2,000 $4,000 $6,000

Other

Healthcare Services

Retailing/Distribution

Consumer Products and Services

Financial Services

Computers and Peripherals

Electronics/Instrumentation

Business Products and Services

Networking and Equipment

IT Services

Semiconductors

Media and Entertainment

Telecommunications

Industrial/Energy

Medical Devices and Equipment

Biotechnology

Software

Industry# of

Deals

% Change $

from 2006

Software 905 2.72%

Biotechnology 477 9.51%

Medical Devices and Equipment 385 39.55%

Media and Entertainment 340 10.31%

Telecommunications 290 -17.37%

Industrial/Energy 286 44.15%

Semiconductors 210 -13.77%

IT Services 202 19.40%

Business Products and Services 129 34.19%

Networking and Equipment 124 17.49%

Consumer Products and Services 102 -6.36%

Electronics/Instrumentation 91 -4.86%

Financial Services 88 29.38%

Computers and Peripherals 66 16.62%

Retailing/Distribution 58 91.38%

Healthcare Services 49 -13.48%

Other 11 57.33%

TOTAL 3813 10.75%

2007 Total: $29.4B in 3,813 DealsVisit www.pwcmoneytree.com for Industry definitions



Investments by Industry – Quarterly Percent of Total U.S. Investments

Top 5 Industries – Q4 ‘06 to Q4 ‘07

(% of Total Dollars)

19.6

9%

6.08

%

10.6

4%

7.83

%

19.7

2%

20.3

7%

7.31

%

14.3

4%

5.07

%

16.8

9%

17.1

0%

7.57

%

14.4

8%

6.34

%

20.8

2%

15.1

9%

12.4

7%

11.3

8%

7.42

%

16.0

0%18.3

5%

9.24

%

12.8

5%

6.29

%

18.1

3%

0%

5%

10%

15%

20%

25%

30%

Biotechnology Industrial/Energy Medical Devices andEquipment

Semiconductors Software

Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07



Life Science Investments – Percent of Total U.S. Investments*

(% of Total Dollars)

19

.69

%

10

.64

%

30

.33

%

20

.37

%

14

.34

%

34

.71

%

17

.10

%

14

.48

%

31

.58

%

15

.19

%

11

.38

%

26

.57

%

18.3

5%

12.8

5%

31.1

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Biotechnology Medical Devices and Equipment Life Sciences

Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07

Life Science Sectors – Q4 ’06 to Q4 ‘07



Investments by Stage of Development: Full Year 2007

($ in millions)

$1,153.3

$5,192.2

$10,845.2

$12,215.0

$0 $3,000 $6,000 $9,000 $12,000 $15,000

Startup/Seed

Early Stage

Expansion

Later Stage

Stage of Development

# of

Deals

% Change in $ Amount from 2006

Expansion Stage 1,235 -5.65%

Later Stage 1,168 24.68%

Early Stage 995 26.58%

Startup/Seed 415 -0.28%

Total 3,813 10.75%

2007 Totals: $29.4B in 3,813 Deals



Investments by Sequence of Financing: Full Year 2007

($ in millions)

$4,024.9

$4,371.1

$8,710.4

$7,229.6

$5,069.7

$0 $5,000 $10,000

Fourth

Third

Second

First

5th and Beyond

Financing# of

Deals

% Change in

$ Amount from

2006

First 1,267 19.61%

5th and Beyond 911 23.56%

Second 733 0.79%

Third 500 2.11%

Fourth 402 -2.92%

Total 3,813 10.75%

2007 Totals: $29.4B in 3,813 Deals



First Sequence Financing – Investment Amount

($ in billions)

$8

.8

$2

.9

$1

.3

$0

.7 $1

.1 $1

.4

$1

.4 $1

.7$2

.0

$1

.2

$1

.0

$1

.3

$1

.5

$1

.6

$1

.7

$6

.2

$1

.3

$1

.0

$1

.1

$1

.2

$1

.4

$1

.7

$1

.9

$5

.4

$1

.3

$0

.8 $1

.1

$1

.3

$1

.4

$1

.4 $1

.9

$8

.4

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

2000 2001 2002 2003 2004 2005 2006 2007

Q1 Q2 Q3 Q4

First Sequence Investments



Stage of Development – Quarterly Percent of Total First Sequence Dollars

(% of first sequence dollars)

51.3

6%

25.9

6%

8.09

%

10.0

0%

38.7

1%

35.3

9%

15.9

1%

9.34

%

50.6

9%

30.4

9%

9.48

%

12.5

4%

34.1

9%

37.5

3%

38.1

1%

32.6

9%

9.94

%14.5

9%

15.7

4%19.2

6%

0%

10%

20%

30%

40%

50%

60%

70%

Startup/Seed Early Stage Expansion Later Stage

Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07

Stage Development – Q4 2006 to Q4 2007



First Sequence Deals in Startup & Early Stage Companies

728 81

3 946

1,75

9

905

604

581 69

1

539 70

7

2,50

1

840 89

4

28.3%

22.5% 23.1% 23.4%22.4%

19.9%19.5%

20.2%

31.6%31.9%

25.8%

29.3%

25.9%

0

1000

2000

3000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

0%

5%

10%

15%

20%

25%

30%

35%

40%

Seq 1 Deals in Startup/Early Stage% of Total US Deals



First Sequence Financing –Percent of Total U.S. Investments

20.2%22.2%

17.9% 17.4%

19.9%21.9%

20.4% 19.9% 20.3%

25.1%

21.4%

28.0%

23.6% 24.0% 24.9%

21.1%23.0%

24.1%22.8% 22.7%

23.8% 24.7%

27.3%

28.3%26.7% 26.0%

24.9% 24.9% 25.4%27.7% 27.1%

29.4%

32.3%30.8%

31.9%29.9%

32.1%

34.7%

30.4%

33.6% 34.6%

30.6% 29.8%

34.6%32.4%

35.6%

19.3%

26.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

Q1

2002

Q2

2002

Q3

2002

Q4

2002

Q1

2003

Q2

2003

Q3

2003

Q4

2003

Q1

2004

Q2

2004

Q3

2004

Q4

2004

Q1

2005

Q2

2005

Q3

2005

Q4

2005

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

% of Total Dollars % of Total Deals



Median Deal Size vs. Mean Deal Size –Quarterly Total U.S. Investments

$4.5$4.0 $4.0

$3.2$3.6

$4.0 $4.0$4.5

$5.0$4.6 $4.5

$4.8$4.3 $4.5

$4.0

$4.8$4.5

$4.0 $4.0 $4.0$4.5 $4.3

$4.0 $4.0

$8.3

$7.1$6.6

$6.3

$7.4 $7.4 $7.2$7.7 $7.5

$7.1$7.6

$6.8

$8.7

$7.2

$7.8$7.3

$6.8

$6.2

$6.8$7.2 $7.1 $7.0

$7.4 $7.4

$0

$2

$4

$6

$8

$10

Q1

2002

Q2

2002

Q3

2002

Q4

2002

Q1

2003

Q2

2003

Q3

2003

Q4

2003

Q1

2004

Q2

2004

Q3

2004

Q4

2004

Q1

2005

Q2

2005

Q3

2005

Q4

2005

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Median Deal Size Mean Deal Size

In Millions ($)



Post-Money Valuations – Early Stage Companies Q3 2000 to Q3 2007

$25.

2

$21.

6

$10.

5

$8.5

$10.

5

$8.6

$6.8

$13.

9

35.07

30.98

15.9413.74

16.5314.52

12.83

21.54

$9

.9

$9

.4

$6

.0$5

.4

$5

.3 $6

.0

$6

.1

$7

.6

$0

$5

$10

$15

$20

$25

$30

$35

$40

Q3 00 Q3 01 Q3 02 Q3 03 Q3 04 Q3 05 Q3 06 Q3 07

Pre-money Valuation Investment AmountPost-money Valuation

12 Month Average



Post-Money Valuations – Expansion Stage Companies Q3 2000 to Q3 2007

$82.

3

$60.

2

$39.

1

$29.

5

$45.

1

$46.

3

$50.

3

$47.

6

103.47

76.52

52.38

40.13

57.67 60.365.54

59.92

$2

1.2

$1

6.3

$1

4.0

$1

3.2

$1

0.7

$1

2.6 $1

5.3

$1

2.3

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

Q3 00 Q3 01 Q3 02 Q3 03 Q3 04 Q3 05 Q3 06 Q3 07


12 Month Average



Post-Money Valuations – Later Stage Companies Q3 2000 to Q3 2007

$139

.1

$92.

6

$51.

7

$53.

3

$52.

5

$68.

2

$99.

0

$82.

6

168.5

116.26

68.74 67.58 68.87

83.96

113.34

96.04

$2

9.4

$2

3.7

$1

5.7

$1

7.0

$1

4.3

$1

6.4

$1

4.4

$1

3.5

$0

$50

$100

$150

Q3 00 Q3 01 Q3 02 Q3 03 Q3 04 Q3 05 Q3 06 Q3 07


12 Month Average



Full Year 2007 – Most Active Venture Investors

Venture Capital Firm Location Total Deals

Draper Fisher Jurvetson Menlo Park, California 100

New Enterprise Associates Baltimore, Maryland 87

Intel Capital Santa Clara, California 70

Polaris Venture Partners Waltham, Massachusetts 61

Kleiner Perkins Caufield & Byers Menlo Park, California 56

Sequoia Capital Menlo Park, California 55

Menlo Ventures Menlo Park, California 54

Canaan Partners Westport, Connecticut 50

U.S. Venture Partners Menlo Park, California 49

Accel Partners Palo Alto, California 48

Foundation Capital Menlo Park, California 48

Venrock Associates New York, New York 47

InterWest Partners Menlo Park, California 47

Highland Capital Partners LLC Lexington, Massachusetts 47



Thomson FinancialU.S. Private Equity Performance Index (PEPI)

Fund Type 1 Year 3 Year 5 Year 10 Year 20 Year

Early/Seed VC 23.6 6.8 .3.1 34.5 20.8

Balanced VC 38.0 14.4 9.9 15.1 14.3

Later Stage VC 41.4 10.5 8.4 8.3 13.8

All Venture (through 6/30/07) 23.5 10.5 4.8 19.3 16.4

All Venture (through 9/30/06) 8.2 9.3 -1.0 20.8 16.6

NASDAQ 14.2 12.2 17.9 4.8 9.4

S&P 500 10.8 10.7 13.1 4.9 8.1

(Investment Horizon Performance as of 9/30/2007)

Source: Thomson Financial/National Venture Capital Association*The Private Equity Performance Index is based on the latest quarterly statistics from Thomson Financials' Private Equity Performance Database analyzing the cashflows and returns for over 1860 US venture capital and private equity partnerships with a capitalization of $678 billion. Sources are financial documents and schedules from Limited Partner investors and General Partners. All returns are calculated by Thomson Financial from the underlying financial cashflows. Returns are net to investor after management fees and carried interest.



Analysis of Venture-Backed IPO and M&A Activity

Date # of IPOs*

Total Venture-Backed Offer Size ($M)

Average Venture-Backed Offer Size ($M)

Number of Venture-backed M&A deals

Average M&A deal size**

2003 29 2,022.7 69.8 291 62.8

2004 93 11,014.9 118.4 339 83.0

2005 56 4,461.0 79.7 347 95.8

2006 Q1 10 540.8 54.1 105 111.2

2006 Q2 19 2,011.0 105.8 104 100.9

2006 Q3 8 934.2 116.8 93 92.7

2006 Q4 20 1,631.1 81.6 61 154.7

2006 57 5,117.1 89.8 363 110.6

2007 Q1 18 2,190.6 121.7 82 156.6

2007 Q2 25 4,146.8 165.9 82 114.0

2007 Q3 12 945.2 78.8 95 206.0

2007 Q4 31 3,043.8 98.2 45 228.4

2007 86 10,326.3 120.1 304 175.9* Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile**Only accounts for deals with disclosed valuesSource: Thomson Financial/ National Venture Capital Association



Venture Capital Fundraising*

Year First Time Funds

Follow-On Funds

Total FundsVC Raised

($M)

2002 22 157 179 3936.9

2003 38 114 152 10606.1

2004 51 157 208 19057.6

2005 58 170 228 28282.6

2006 46 183 229 31698.1

2007 55 180 235 34675.9

Quarter

Q1 ‘06 19 56 75 6544.5

Q2 ’06 12 65 77 14185.5

Q3 ’06 12 55 67 5375.3

Q4 ’06 15 50 65 5592.8

Q1 ’07 21 59 80 5754.2

Q2 ’07 17 68 85 9141.8

Q3’ 07 15 62 77 8763.7

Q4’ 07 16 47 63 11016.2Source: Thomson Financial/National Venture Capital Association *These figures take into account the subtractive effect of downsized funds Date current as of 1/14/08

February 2008

North Carolina Picture

Historical Trends

Slide 34PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial

February 2008

2000 2001 2002 2003 2004

# of Deals

2005 2006 2007

$408

$617

$498

$303

$225

$133$158

$353

$144

$56

$123

$163

$97$108$136

$93$119

$83$102

$29

$97

$175$129

$83$56

$82

$226

$114$119$93

$141

$153

$0

$100

$200

$300

$400

$500

$600

$700

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

42 37 28 14 2041 34 32 22 22 14 20 23 22 20 14 9 15 17 13 18 1115 11 20 19

($ in millions)

16 15 1817 15

MoneyTree Total North Carolina InvestmentsMoneyTree Total North Carolina Investments2000 – 20072000 – 2007

21


February 2008

$433

$812

$1,826

$553 $510$338$356$584

1.7%

1.4%

1.8%1.9%

3.0%

1.5%

1.9%

2.5%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2000 2001 2002 2003 2004 2005 2006 2007

0%

1%

2%

3%

Total NC Investments NC % of U.S. Total Amount# of Deals

154 90 85 77 56 7153 70

MoneyTree Total North Carolina Investments – MoneyTree Total North Carolina Investments – 2000 – 20072000 – 2007($ in millions)


February 2008

85

70

56

77

90

156

53

71

1.9%

1.9%

1.8% 1.7%

2.8%2.0% 2.6%

2.0%

$0

$20

$40

$60

$80

$100

$120

$140

$160

2000 2001 2002 2003 2004 2005 2006 2007

0%

1%

2%

3%

Total # NC Deals NC % of U.S. Total DealsAmountInvested

(in millions)

$1,826 $584 $553 $358 $338 $812$433 $510

MoneyTree Total North Carolina Deals– MoneyTree Total North Carolina Deals– 2000 – 20072000 – 2007

($ in millions)




North Carolina Investments by MSA2000 - 2007($ in millions)

$662

.7

$90.

2

$46.

7

$34.

6 $88.

4

$16.

6

$122

.7

$7.5

$10.

5

$46.

1

$21.

2

$36.

5

$21.

4

$19.

7

$58.

5

$483

.3

$455

.8

$285

.7

$212

.7

$369

.7

$362

.5

$744

.0

$105

.2

$0.0

$4.8

$17.

0

$0.0 $2

5.6

$5.5

$2.0$5

8.1

$1,0

00.2

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2000 2001 2002 2003 2004 2005 2006 2007

Charlotte/Gastonia Greensboro/Winston-Salem Raleigh/Durham/Chapel Hill Other



North Carolina Investment % by MSA2000 - 2007

36%

15%

8% 10%

26%

4%

24%

1%2%

8% 6%

11%

5% 4%

7%

83%

82%

80%

63%

85%

71%

92%

6%

0%

5%

0%

6%

1%

0%3%

55%

1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007

Charlotte/Gastonia Greensboro/Winston-Salem Raleigh/Durham/Chapel Hill Other

February 2008

$8.0

$20.0

$23.0

$23.5

$27.6

$30.0

$33.0

$42.8

$237.2

$99.0

$254.8

$0 $40 $80 $120 $160 $200 $240 $280

Other

Networking & Equipment

Consumer Products & Svcs

Industrial/Energy

Semiconductors

Electronics/Instrumentation

Business Products & Svcs

Media & Entertainment

Software

Medical Devices & Equipment

Biotechnology

Telecommunications

Total Deals2007

% Change in $ Amount from

2006($ in millions)

25

4

Total North Carolina Investments by Industry –Total North Carolina Investments by Industry –Full-Year 2007Full-Year 2007

2007 Total: $812.0

8

1

4

3$13.0

1

1

5

13

2

4

120.2%

13.1%

41.3%

900.0%

(18.3%)

394.0%

(65.6%)

10.1%

242.7%

47.7%

75.1%

152%


February 2008

Total North Carolina Amount

$812.0 million

Total U.S. Amount $29.4 billion

18%

9%

18%6%

13%

6%

7%

23%

Software$5.3

Industrial/Energy

$2.7

Others$6.4

Telecom$2.1


$3.9Media &

Entertainment$1.9

5%

4%

29%

11%

4%

12%

4%32%


$99.0

3%

Others$87.6

Electronics & Instrumentation$27.6

Biotechnology$237.2

Business Products & Services

$30.0

Telecommunications$254.8

(in billions)(in millions)

Biotechnology$5.2

Total North Carolina vs. U.S. Investments by Industry – Full-Year 2007Total North Carolina vs. U.S. Investments by Industry – Full-Year 2007

Software$42.7

Semiconductors$1.8


Media & Entertainment

$33.0

February 2008

$237

$227

$140$121 $120 $108

$161

$181

12.4%

3.3%4.1%5.3% 5.0% 4.7%

2.8% 2.3%

33.9% 41.1%

21.1%

29.2%

35.6%

41.7%

24.1%

$0

$50

$100

$150

$200

$250

2000 2001 2002 2003 2004 2005 2006 2007

0%

10%

20%

30%

40%

50%

Total # NC Deals % of Total U.S. Investment in Biotech % of Total NC Investments

($ in millions)

Biotechnology Investments in NC vs. U.S.Biotechnology Investments in NC vs. U.S.2000 – 20072000 – 2007

21 17 17 17 18 2514 16

# of Deals

4.8%


February 2008

$82

$29

$58$43

$154

$323

$23

17.8%

0.6%1.1% 0.5%1.6%1.3% 1.5% 1.0%

14.9%

5.7%

17.2%

5.4%

12.4%

7.4%

26.4%

$0

$50

$100

$150

$200

$250

$300

$350

2000 2001 2002 2003 2004 2005 2006 2007

0%

10%

20%

30%

Total # NC Deals % of Total U.S. Investment in Software % of Total NC Investments

($ in millions)

Software Investments in NC vs. U.S.Software Investments in NC vs. U.S.2000 – 20072000 – 2007

36 25 24 22 19 138 12# of Deals

0.5%$42


February 2008

Average Deal Size – NC vs. U.S.Average Deal Size – NC vs. U.S.2000 – 20072000 – 2007

$7.3 $7.7

$13.3

$9.1

$7.1$6.8 $7.3 $7.3

$11.9

$6.5 $6.5

$4.7

$6.0

$8.2$7.3

$11.4

$0

$5

$10

$15

2000 2001 2002 2003 2004 2005 2006 2007

U.S. Average Deal Size NC Average Deal Size

($ in millions)




6th Sense Analytics, Inc. Software $

5,000,000

AlphaVax, Inc.Biotechnology $ 12,650,000

Chimerix, Inc.Biotechnology $ 23,099,900

HyperBranch Medical Technology, Inc. Medical Devices & Equipment $

2,000,000

INI Power Systems, Inc. Electronics/Instrumentation $

883,000

InnerPulse, Inc.Medical Devices & Equipment $ 50,000,500

Liquidia Technologies, Inc. Industrial/Energy $

15,999,900

Motricity Telecommunications $ 50,000,000

Nextreme Thermal Solutions, Inc. Electronics/Instrumentation $

5,292,000

Phase Bioscience, Inc. Biotechnology $

1,250,100

Regado Biosciences, Inc. Biotechnology $

23,000,200

rPath, Inc. Software $ 1,749,900

Serenex, Inc.Biotechnology $ 13,999,800

StrikeIron, Inc.IT Services $ 5,000,000

Tranzyme Pharma, Inc. Biotechnology $

11,000,000

Unit Dose Solutions, Inc. Biotechnology $

2,500,000

XDS, Inc. IT Services $ 2,274,000

$

225,699,300

North Carolina Companies Funded in Q1 2007North Carolina Companies Funded in Q1 2007

Company Name AmountIndustry



Biolex, Inc.Biotechnology $ 29,999,600

Brightdoor Systems, Inc. Software $

2,000,000

Cetero ResearchBiotechnology $ 15,448,000

ChannelAdvisor Corporation Business Products and Services $

29,999,900

CoLucid Pharmaceuticals, Inc. Biotechnology $

8,250,000

Datacraft Solutions, Inc. Software $

4,000,000

Digitalsmiths Corporation Computers and Peripherals $

6,000,000

iContact Corporation Software $

5,350,000

INI Power Systems, Inc. Electronics/Instrumentation $

4,000,000

Integrated Oncology Solutions, Inc. Biotechnology $

500,000

Micell Technologies, Inc. Industrial/Energy $

5,555,000

NephroGenex, Inc. Biotechnology $

3,314,100

Nomacorc LLCIndustrial/Energy $ undisclosed

RadarFind Corporation Medical Devices and Equipment $

3,000,000

Semprius, Inc.Semiconductors $ 4,100,000

Serenex, Inc.Biotechnology $ 11,999,900

Viamet Pharmaceuticals, Inc. Biotechnology $

999,900

Visitar, Inc.Software $ 1,330,000

$

135,846,400





Aerie Pharmaceuticals, Inc. Biotechnology $

10,000,000

Aldagen, Inc.Biotechnology $ 9,000,000

Batanga.comMedia and Entertainment $ 30,000,000

Cempra Pharmaceuticals Biotechnology $

8,297,000

CeNeRx BioPharma, Inc. Biotechnology $

2,027,000

Hatteras Networks, Inc. Networking and Equipment $

8,000,000

Hyperbranch Medical Technology, Inc. Medical Devices & Equipment $

undisclosed

Immaculate Baking Company Retailing/Distribution $

2,044,000

M3 Technology Group Telecommunications $

7,499,000

Micell Technologies, Inc. Industrial/Energy $

1,500,000

NCSRT, Inc.Electroinics/Instrumentation $ 1,000,000

Overture Networks, Inc. Telecommunications $

12,272,200

Semprius, Inc.Semiconductors $ 550,000

Viamet Pharmaceuticals Biotechnology $

1,200,000

CONFIDENTIAL Biotechnology $

3,750,000

$

97,139,200





Artus Labs, Inc. Software $

579,000

BlueStripe Software, Inc. Software $

5,000,000

Cempra Pharmaceuticals, Inc. Biotechnology $

10,000,000

Centice Corporation Semiconductors $

11,365,200

Clinipace, Inc.Software $ 2,600,000

Inlet Technologies, Inc. Media and Entertainment $

3,000,000

LED Lighting Fixtures, Inc. Electronics/Instrumentation $

16,500,000

Motricity Telecommunications $

185,000,000

nContact Surgical, Inc. Medical Devices and Equipment $

8,500,000

Nitronex Corporation Semiconductors $

7,500,000

Oriel Therapeutics, Inc. Medical Devices and Equipment $

11,500,000

Phase Bioscience, Inc. Biotechmology $

5,370,000

Piedmont Pharmaceuticals LLC Biotechnology $

8,500,000

Primo Water Corporation Consumer Products and Services $

20,000,000

Proventys, Inc.Software $ 4,550,100

Rx Medic Systems, Inc. Software $

2,000,100





Rx Medic Systems, Inc. Software $

2,000,100

TransEntrixMedical Devices and Equipment $ 21,000,000

Transyme Pharma, Inc. Biotechnology $

19,999,900

Viamet Pharmaceuticals, Inc. Biotechnology $

1,025,000

VMI, LLCMedical Devices and Equipment $ 3,000,000

XDS, Inc. Software $ 6,348,000

$

353,337,100



(continued)



VC Funds Active in North Carolina

BancAmerica Capital Investors

BB&T Capital Partners

CapitalSouth Partners LLC

Carousel Capital Partners

Centura SBIC Inc.

Chrysallis Ventures

Core Capital

Dogwood Equity

Frontier Capital LLC

Golden Pine Ventures

Grotech Capital Group

Hatteras BioCapital

H.I.G. Ventures

Intel Capital

Intersouth Partners

Kodiak Venture Partners

Lovett Miller & Company, Inc.

NC IDEA

New Enterprise Associates

Noro-Moseley Partners

Novak Biddle Venture Partners

Pappas Ventures

Piedmont Angel Network

Polaris Venture Partners

Quaker BioVentures

River Cities Capital Funds

SJF Ventures

Southern Capitol Ventures

The Atlantis Group

The Aurora Funds

Trinity Ventures

TriState Investment Group

Wachovia Capital Partners

Wakefield Group

WWC Capital Group



Entrepreneurs and Venture Capital On-Line Resource ListEntrepreneurs and Venture Capital On-Line Resource Listwww.pwc.com - The PricewaterhouseCoopers Global website.

www.pwcmoneytree.com, www.nvca.org, www.venturexpert.com - The PricewaterhouseCoopers/National Venture Capital Association MoneyTree TM Report based on data from Thomson Financial is a quarterly study of equity investments made by the venture capital community in private companies in the U.S. The survey identifies regional and national trends, entrepreneurial developments and promising industry segments.

www.pwcnextwave.com - PricewaterhouseCoopers’ thought leadership articles for the world of private equity.

www.cfodirect.com - CFOdirect Network – PricewaterhouseCoopers’ online accounting, finance and business resource for senior financial executives.

www.pwcV2R.com - The Vision to Reality Entrepreneur Resource Center site offers proven business plan templates, financial models, technology-specific ratios, benchmarks and more.

www.pwcvc.com - The VC BestPractices site serves to provide an aggregate, comparative view of key issues and activities impacting the venture capital community, and to identify best practices.

www.barometersurveys.com - PricewaterhouseCoopers’ Trendsetter and Technology Barometers site – result & analysis of the quarterly survey of fast-growth and large company CEO’s.

www.cednc.org - The Council for Entrepreneurial Development

www.nctechnology.org - North Carolina Technologies Association



For more information, contact:

Jeff Barberor

Terry Bowling

Carolinas Technology Industry GroupPhone 919 755-3000

[email protected]@us.pwc.com


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